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Elon fires back at Eberhard in Tesla lawsuit's latest twist

Shortly after Tesla Motors co-founder Martin Eberhard filed a lawsuit against Tesla Motors and its Chairman, Product Architect and CEO Elon Musk, the Silicon Valley automaker had this to say:

This lawsuit is a fictionalized, inaccurate account of Tesla's early years -- it's twisted and wrong, and we welcome the opportunity to set the record straight. Incidentally, Tesla will also be filing counterclaims and in the process present an accurate account of the company's history.

The first bit of record resetting has shown up on the official Tesla blog. Not surprisingly, Elon Musk has lots to say in regards to the early years of the Roadster's development, and he seeks to offer his side of the story, along with a number of emails to back up his claims.

What does Musk say? Well, his initial response is a long, informative and extremely interesting read. Here are some choice lines:

The facts are that when I requested through AC Propulsion to meet Eberhard, he had no technology of his own, he did not have a prototype car and he owned no intellectual property relating to electric cars.

At the time [early 2004], "Tesla Motors, Inc." consisted of Eberhard, Tarpenning and Wright, plus an unfunded business plan and they were looking for an initial round of funding to create a more advanced prototype than the AC Propulsion Tzero. While there was a basic corporation in place, Tesla hadn't even registered or obtained the trademark to its name and had no formal offices or assets.

To save legal fees, we just copied the SpaceX articles of incorporation and bylaws for Tesla and I invested $6.35M (98%) of the initial closing of $6.5M in Series A funding. Eberhard invested $75k (approximately 1%). In another crossover, I had the same people who created the SpaceX logo also create the Tesla logo.

For the first few years of Tesla's existence, I trusted Eberhard to execute on the operational task of taking the Tzero concept and creating a commercial electric sports car. My involvement was primarily focused on the body design, technical specifications and building the Tesla brand.

Eberhard has simultaneously implied that I had nothing to do with the creation of the Roadster and that I micromanaged the design and thus caused the cost overruns. Obviously, those claims are mutually exclusive.

The real reason that Roadster development cost so much more than can be accounted for by typical entrepreneurial hubris is that we essentially had to spend the development money twice. After Eberhard was asked to step down from the CEO role two years ago, almost every major system on the car, including the body, HVAC, motor, power electronics, transmission and battery pack, had to be redesigned, retooled or switched to a new supplier. With the release of the Roadster 2 this month, we are finally at the point where Tesla has a solid supply chain and a unit cost that allows us to operate the Roadster business line profitably.

This point is so trivial that I'm nearly inclined to skip it. However, in the absence of an explanation, it may sound as though I was being petty in giving Eberhard the third production car rather than the second production car. The reason for the delayed delivery was that there was considerable debate at the board level as to whether Eberhard should receive a car at all or whether he should be refunded his money.

This surely won't be the last we hear from either side of the lawsuit. Anyone with an interest in keeping tabs on the company, its founders and its future should click here to read Elon's blog entry in its entirety.

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Anonymous

5 Years Ago

You know, looking back at the Roadster's development, even from an outsider's perspective the story makes sense. It felt like Tesla was almost done...and then they took years more to get to market. There seemed to be more than just transmission troubles going on behind the scenes.

With all such things it's hard to know who to side with, but Musk makes a pretty compelling case. However, influencing my judgment is the fact that Eberhard's departure has not been bad for Tesla; in fact, they've seen their greatest successes without him. That alone is a compelling indictment.

Anonymous

5 Years Ago

'Bout what I expected, really. And probably not a wise move to punch this tar-baby. Wanna bet that Martin Eberhard has a plethora of e-mail messages that will prove equally enlightening? Looks like Pandora's box is about to open wide.

I wish we could hear some third-party perspectives on this whole tug-of-war. Say, from Tom Gage, Ian Wright, Marc Tarpenning, Alec Brooks, or Wally Rippel.

I also wish we could finally see a scan of that physics degree. Sorry, but a mere "poster" doesn't really convince me: university printshops rarely bother to verify a speakers' claimed credentials by checking the registrar's records.

Anonymous

Anonymous

5 Years Ago

I've been an ABG and AB reader for a while now. I think maybe from the beginning. As I was saying to some of my friends over dinner two nights ago I'm afraid that the time to stop has come. All the undeserved exposure that you give to this guy, musk or whatever, can be good for your ratings but it doesn't look right for people that likes hard work and honesty to be rewarded not the opposite. You all know who and what this guy is...you know whatâ¦ it's not even worth itâ¦

Anonymous

5 Years Ago

Daimler might well want to offer a luxury EV, and using the same batteries and motor drive as the Model S could make it quick and easy. Tesla also benefits, with additional sales of EV components, more validation of the EV market, and even the possibility that Mercedes dealerships could offer "Tesla Certified" service for their EVs, and of course, Tesla sales outlets could offer service for Mercedes EVs as well.